Luminar on the Rise: Better Than Expected and with New Contracts

Luminar's stocks experienced a notable surge in Tuesday trading after the company released its latest quarterly results and announced a new deal. The stock price of the lidar technology specialist closed with a remarkable gain of 10.8%, peaking at an increase of 15.7% at times. After the market closed, Luminar presented its third-quarter results, revealing an unexpectedly low loss despite revenues falling short of expectations. Simultaneously, the company announced the signing of new contracts with Volvo and a major Japanese automaker. The adjusted loss per share for the quarter was $0.16 on revenue of $15.49 million. While the loss was within Wall Street's expectations, revenue significantly lagged behind the analyst forecast of $19.06 million. Compared to the previous year, revenues decreased by 8.6%, although this was mitigated by management's statement that, excluding the impacts of a renegotiated production contract, revenues had increased compared to the prior quarter. Particularly encouraging for Luminar is that its technologies will become standard in Volvo vehicles beyond the EX90 series. Furthermore, the major Japanese automaker is intensifying its use of Luminar’s lidar technologies and has also ordered new software functionalities. For the fourth quarter, Luminar forecasts moderate revenue growth compared to the previous quarter and expects a significantly reduced loss. This is to be supported by cost-saving measures and a production halt as Volvo reduces its inventories. Although the gain in today's stock price is substantial, the stock remains about 66% down over the year. If additional major contracts for lidar technologies and software are secured, the stock could experience an impressive recovery. Nevertheless, Luminar remains a highly speculative investment, offering both significant opportunities and considerable risks.